Insurance through super – is this the right option for me?

Insurance through super can be a simple, tax-effective way to protect yourself and your family.

Generally super is a tax-effective way to hold your insurance if you are able to pay for the premiums either with pre-tax dollars by salary sacrificing to your super fund, by making personal deductible contributions, or with your employer contributions. This makes insurance through super a cost-effective and convenient way to make sure you’re covered.

Here are a few points to think about when considering whether insurance inside super is the right option for you. 

• Temporary salary continuance (also called income protection), total and permanent disablement and death cover are available within most retail and corporate super funds. 
• As with insurance outside of super, you can apply to increase or add cover to reflect your current situation. You may need to provide some additional information on your health and financial situation. 
• You can organise to pay your insurance premiums from pre-tax super contributions, instead of using your take home pay, which has been taxed at your marginal rate. 
• If you have an employer default super fund, it is likely your employer will have automatically negotiated some cover for you. The amount of cover and the cost of this cover will vary between super funds. As this automatic level of cover is not tailored to your situation, it may not be enough, or a comprehensive insurance package.

It’s a good idea to talk to your financial planner when deciding whether insurance inside or outside of super is the right choice for you. Making sure you have the right type of plan, amount of cover, benefits that will not affect your retirement savings, and benefits that will be paid to the right people are all important considerations that your financial planner will be able to help you with.

Read more about AMP’s Death and TPD cover and compare the benefits of the cover inside and outside super.